Friday, September 23, 2011

On the emotive issue of the Palestinian request for UN admission as a state, ...Obama delivered one of the most impassioned statements in support of Israel ever made by an American president in the well of the General Assembly.

... Obama went far beyond just making a case for negotiations as the only way to resolve the conflict. ...Obama's speech to the assembled leaders from more than 190 countries was essentially a call for people around the world to put themselves in the shoes of Israel and, most notably, the Jewish people. As he said:

"Let us be honest with ourselves: Israel is surrounded by neighbors that have waged repeated wars against it. Israel's citizens have been killed by rockets fired at their houses and suicide bombs on their buses. Israel's children come of age knowing that throughout the region, other children are taught to hate them.

Israel, a small country of less than eight million people, looks out at a world where leaders of much larger nations threaten to wipe it off of the map. The Jewish people carry the burden of centuries of exile and persecution, and fresh memories of knowing that six million people were killed simply because of who they are. Those are facts. They cannot be denied.

The Jewish people have forged a successful state in their historic homeland. Israel deserves recognition. It deserves normal relations with its neighbors. And friends of the Palestinians do them no favors by ignoring this truth, just as friends of Israel must recognize the need to pursue a two-state solution with a secure Israel next to an independent Palestine."

...Obama's statement was not, one should point out, the unvarnished, chapter-and-verse recitation of Israel-friendly policy views on substantive issues. He could have noted that only one of the two parties -- the Palestinians -- has refused to negotiate since last September.

He might have specifically underscored the reality of a divided Palestine, in which a sizable part of the state seeking UN recognition is under the control of a terrorist movement committed to Israel's (and the Palestinian Authority's) destruction.

He did not take the opportunity to clarify certain aspects of his parameters for peacemaking that he sidestepped in his May remarks, such as the eminently logical principle that Palestinian refugees will return to Palestine, not Israel, or

the urgency of an agreement that ends the conflict and terminates all claims once and for all.

He could have scolded many in the room, especially Arab states and their all-talk-but-no-action approach to the Palestinian state-building project.

And he should have called specifically on rulers and peoples in countries that already have treaties with Israel (i.e., Egypt and Jordan) to strengthen the regional environment for peace by defending their strategic choice for peace, rather than letting it be the preferred pinata for discontent over domestic issues.

Still, those deficiencies only marginally detract from the declaratory power of his speech. Many factors may have motivated the president to make his passionate statement opposing Palestinian UN recognition, but whether it was born of high policy, moral conviction, or crass politics, it will be compared in the annals of America's lonely defense of Israel at the United Nations alongside Daniel Patrick Moynihan's castigation of the Zionism-is-Racism resolution during the Ford administration, and John Negroponte's declaration during the George W. Bush administration that the United States would veto any Security Council resolution on the Middle East conflict that failed to condemn terrorism against Israel....

Thursday, September 22, 2011

Never mind the collapse in confidence in Europe, the Palestinian proposal for United Nations recognition and heightened tensions with neighboring Egypt and longtime ally Turkey. The Israeli economy just keeps growing faster than the rest of the developed world.

The International Monetary Fund this week raised its forecast for the country and cut its estimate for the global economy on the impact of the European debt crisis. Israel's gross domestic product will expand 4.8 percent this year, according to the Washington-based lender. That's up from an April forecast of 3.8 percent and triple the pace for the average of the 34 advanced economies.

Citigroup Inc. said on Sept. 18 it would establish a new Israeli research center and Standard & Poor's a week earlier raised the country's credit rating. It cited the discovery of two gas fields off the coast of Israel that hold an estimated 25 trillion cubic feet of the fuel.

“The Israeli economy is very vibrant,” Finance Minister Yuval Steinitz said in a Sept. 20 interview with Bloomberg Television. “We enjoy very low unemployment and nice economic growth and this is mainly because we managed to develop very advanced high tech industries and very strong exports.”

The stock market in Israel, whose population of 7.8 million is similar to Switzerland's, was upgraded to developed-market status by MSCI Inc. in May 2010, the same month the 63-year-old country was accepted into the Paris-based Organization for Economic Cooperation and Development.

The country has about 60 companies traded on the Nasdaq Stock Market, the most of any nation outside North America after China and is also home to the largest number of startup companies per capita in the world.

Technology Capital

Israel ranks third in terms of projected growth this year among MSCI's list of 24 developed economies, after 6 percent for Hong Kong and 5.3 percent for Singapore, according to the IMF.

“Israel's exports are high-added value exports like informatics and technology,” said Jean-Dominique Butikofer, a fund manager who helps oversee about $1 billion of emerging- market debt at Union Bancaire Privee in Zurich, including quasi- sovereign Israeli bonds. “They're not exporting Gucci bags. If there's a slowdown, these are the kind of assets that are good to have.”

Venture-capital backed Israeli technology companies raised $364 million in the second quarter of this year, a 77 percent jump from the $206 million raised in the year-earlier period, according to PricewaterhouseCoopers LLP Moneytree report. Seventy-six companies raised funding in the three-month period, compared with only 60 last year, the report said.

Talent Pool

“One reason that the economy continues to do well is the component of innovation and ability to adapt to a changing environment,” Citigroup Israel Managing Director Ralph Shaaya said in explaining the New York-based bank's decision to locate a research center in Israel. ‘There is a rich pool of talent in the high tech sector. The propensity for innovation is high.”...

... Standard & Poor [raised] Israel's credit rating earlier this month to A+, its fifth-highest investment-grade rating, just a few weeks after cutting the U.S. and before cutting Italy. S&P cited the two gas fields, Tamar and Leviathan, off its Mediterranean coast.

“You have a situation where the global economy is clearly running into a roadblock and having a tough time while the Israeli economy is going to bend but it isn't going to break,” said Daniel Hewitt, senior emerging-market economist at Barclays Capital in London. “We think Israel can maintain positive growth. Israel has a strong economy with a strong base.”

Wednesday, September 21, 2011

..Seven months after the start of the Arab uprisings, Israel's position is a paradox. The prospects for a formal peace are the worst since 1977, while Israel's military position has improved.

The Syrian army is too busy butchering protesters to attack the Jewish state, and the uncertain position of the Bashar al-Assad regime weakens its Lebanese client Hezbollah. Egyptian popular sentiment has turned nastily against Israel, but the last thing the Egyptian army needs at the moment is a war with Israel that it inevitably would lose.

Egypt is a failed state. It has no way out.

Chinese pigs will eat before the Egyptian poor, as wealthy Asians outbid impoverished Arabs for grain. Egypt imports half its caloric consumption, and its foreign exchange reserves last week dipped below what its central bank called the "danger" level of $25 billion covering six months of imports, down from $36 billion before Hosni Mubarak was toppled.

The reported reserve numbers probably include Saudi and Algerian emergency loans. With no tourism and much of the economy in shambles, the country is sliding towards destitution; it barely can feed itself at the moment. What will Egypt do when its reserves are gone? Almost half of Egyptian adults can't read, and the 800,000 young people who graduate yearly from the diploma mills are qualified only to stamp each other's identity cards. It is not surprising that football rowdies attacked Israel's embassy in Cairo last week.

The rupture in Israeli-Turkish relations, in turn, reflects Turkish weakness as well as the fanaticism of Prime Minister Recep Tayyip Erdogan. Turkey faces a short-term squeeze and a long-term crisis. Erdogan won re-election last June more as an economic manager than as neo-Ottoman imperial leader, but his economic success rested on a 40% rate of bank credit growth, and a consequent current account deficit equal to 11% of gross domestic product, the same level as Greece or Portugal.

As I reported last month (Instant obsolescence of the Turkish model, Asia Times Online, August 10, 2011), Turkey's stock market has fallen by nearly half in dollar terms since late 2010, and its currency has lost 20% of its value. Erdogan's economic Cave of Wonders has dissolved into the Anatolian sand, and Turkey faces a long period of belt-tightening.

Turkey's economic problems are a discomfort; its ethnic problems, by contrast, present an existential threat in the long run. In a quarter of a century, Kurdish will be the cradle-tongue of nearly half of all Turkish children, as Kurds have four to five children per family while Turkish-speakers have just 1.5. At some point, Turkey in its present form will cease to exist. Kurdish nationalism is stronger than ever; as Omar Aspinar [1] of the Brookings Institution wrote on September 11 in Zaman Online:

Kurdish political aspirations have reached unprecedented levels in the last 10 years ... Kurdish ethnic, cultural and political demands are fueled by a young and increasingly resentful generation of Kurds who are vocal and frustrated not only in Eastern Anatolia but also in Turkey's large Western cities including Istanbul, Izmir, Mersin and Adana. Turkey's nightmare scenario is Turkish-Kurdish ethnic violence in such western urban centers.

The Kurds know that the demographic future belongs to them, and that Erdogan's frantic calls on Turkish women to have more babies will do nothing to change matters. "The Kurdish issue," warns Aspinar," remains Turkey's Achilles' heel."

Rather than isolate Israel diplomatically, Turkey and Egypt have buttressed its diplomatic position. By declaring the United Nations' Palmer Commission report on the May 2010 Gaza flotilla incident "null and void", Turkish President Abdullah Gul put his country in the position of the rogue state. Egypt's failure to prevent an attack on Israel's embassy was a gross violation of international standards. Diplomacy, though, makes little difference, because Israel requires only the support of the United States.

The most likely outcome is a prolonged low-intensity war in which Israel suffers more rocket attacks from Lebanon and Gaza, and occasional terrorist infiltration from Sinai and the West Bank, but no organized military threat from its immediate neighbors.

Iran's nuclear program presents an existential threat to Israel, and remains the great unknown in the equation.[Actually it's a well-known existential threat, and a likely cause of a real "hot" war soon, but that's another story ... SL]

As Jonathan Spyer wrote in a September 11 report for the Gloria Center, Iran's attempt to lead an anti-Israel resistance bloc "has fallen victim to the Arab Spring", particularly after Tehran aided the despised Syrian regime. But Speyer warns that this "should be cause for neither satisfaction nor complacency".

A country that knows it must fight daily for its existence may thrive under interrupted stress. That is unimaginable for the Israeli peace camp, which dwindled into political insignificance after the Intifada of 2000, as well as for America's liberal Jews. But most Israelis seem to have adapted well to a long-term war regime...

Speaking Sunday at the UN's conference of donors to the Palestinian Authority, Deputy Foreign Minister Daniel Ayalon warned that while Israel supports economic assistance to the PA now, that is liable to change within the week.

As he put it, "Future assistance and cooperation could be severely and irreparably compromised if the Palestinian leadership continues on its path of essentially acting in contravention of all signed agreements which also regulate existing economic relations between Israel and the Palestinian Authority."

Ayalon's position is eminently reasonable. Unfortunately, it contradicts utterly the official position of the Government of Israel.

The government's position was transmitted on Friday to the same donor conference that Ayalon was participating in. According to the government document, "Israel calls for ongoing international support for the PA budget and development projects that will contribute to the growth of a vibrant private sector, which will provide the PA an expanded base for generating internal revenue."

Israel's move was reportedly championed by the Defense Ministry and the IDF senior brass, which reportedly adamantly opposes cutting off any aid to the PA, including aid to the US-trained and financed Palestinian army in Judea and Samaria. As The Jerusalem Post reported on Sunday, senior Defense Ministry officials argue that an aid cutoff is liable to lead to the PA's collapse and PA employees - which comprise the majority of Palestinian workers - may become violent.

As one Defense Ministry senior official told the paper, "It is important that we retain financial stability, even after their unilateral moves. Stopping money transfers could lead to a financial crisis which could lead to a violent escalation."

In other words, the Defense Ministry argues that if the donor countries stop paying off the Palestinian militias - including the US-trained and funded Palestinian army - then their supposedly moderate forces will turn to the terror business to support themselves.

Aside from being strategically insane, this position bespeaks an unjustifiable unwillingness on the part of the leftist-dominated Defense Ministry to understand the basic nature of the Palestinian cause and what it requires from Israel.

Since the IDF and the Foreign Ministry and the rest of the government bureaucracy embraced the PLO as Israel's "peace partner" 18 years ago, they have been operating on the assumption that the PLO and its spinoffs - Fatah and the PA - are interested in reaching a peace deal with Israel. But this has never been the case.

For the PLO and its spinoffs, the Palestinian conflict has always been and will always be a zero sum game. The goal of the Oslo process, the goal of the PA, of the Palestinian militias, and of the UN bid is one: to strengthen the Palestinians and weaken Israel.

As far as Israel's "peace partner" is concerned, Israel can never concede enough. There is no deal that Israel can ever offer that the Palestinians will ever accept. Even if Israel offered to destroy itself and hand its ruins to the Palestinians, the Palestinians would pocket the concession and then declare war against whatever remnants remain of the defunct Jewish state in order to "liberate" the land from its Jewish "occupiers."

We know this is the case because this is what the Palestinians - led by the PLO/Fatah/PA - did in Gaza after Israel unilaterally surrendered. The last military vehicle had barely cleared the border when the Palestinians torched the synagogues Israel had left standing.

So too, after Ehud Barak essentially offered the Palestinians Israel's head on a platter when he offered them the Temple Mount, they pocketed his offer and began butchering Israelis in a bid to "liberate" the Temple Mount.

The much vaunted Palestinian security forces organized, funded and directed the terror war. And the internationally financed PA budget paid for it.

The reason that the Palestinians are turning to the UN is not because they cannot receive statehood in the framework of a peace deal with Israel. They are going to the UN because they don't want a peace deal with Israel. They want sovereignty and they want to remain at war with Israel.

For 18 years the IDF's top brass has refused to recognize the game that the PLO has been playing since the onset of the fake peace process. Informed by the leftist establishment, the IDF's senior officers vacuously argue that Israel's only option is to strengthen the PA, including its US-trained and funded army.

This appeasement mindset has paralyzed the IDF's ability to develop comprehensive strategies for victory for nearly a generation. And the IDF's leadership clings to appeasement despite the fact that the public has completely rejected it due to its consistent failure.

The basic rule of commonsense policy-making is to be good to your friends and bad to your enemies because then people will want to be your friends and they will not want to be your enemies. The appeasement mindset turns this rule on its head.

As far as the appeasers are concerned, you must be good to your enemies and bad to your friends because your enemies will stop hating you if you're nice to them. As for your friends, they are wrong to be your friends since you have yet to be worthy of friendship since you have not yet appeased your enemies.

By supporting continued foreign aid to the Palestinians in the aftermath of their UN bid the government has adopted a classic appeasement policy. It has told the Palestinians that they will pay no price for their act of aggression. Worse, Israel just told them they will be rewarded. Israel has gone on record saying it cannot manage without the Palestinian governing body that exists to destroy it.

As for Israel's friends, the government just pulled the rug out from under their feet. Cong. Ileana Ros-Lehtinen, the chairman of the House Foreign Affairs Committee, is a true friend of Israel. Her bill calling for a cutoff of US aid to the PA and a massive decrease of US aid to the UN in the event the UN upgrades the Palestinians' diplomatic status is one of the most important pieces of pro-Israel legislation to be introduced in the US Congress in a generation.

By announcing it opposes an aid cutoff, Israel undermined Ros-Lehtinen's position. It betrayed its good friend.

No doubt Prime Minister Binyamin Netanyahu and Foreign Minister Avigdor Liberman were under great pressure from the IDF and from the Obama administration to call for continued international funding of the PA. But the public didn't elect them with the expectation that they would abandon Israel's national interest and harm its friends just because they feel the heat.

The appeasers claim that Israel wins international approval by being good to its enemies. But 18 years of consistently attacking its friends and praising its foes has brought Israel to the brink of international isolation. We have empowered our foes and demoralized our friends. And now we continue to squander what little diplomatic influence we still have left in a bid to again aid the Palestinians in their continued war against us.

If the government thinks that Ayalon's statement can repair the damage it just caused the country, it should think again. The only way to fix what just happened is for the government to issue a new policy supporting the cutting off of foreign aid to the Palestinians and announcing that Israel will stop transferring tax revenues to them if their status at the UN is upgraded in any way. And Netanyahu should pick up the phone and personally apologize to Ros-Lehtinen for his government's disgraceful behavior.

*Caroline B. Glick is the senior Middle East Fellow at the Center for Security Policy in Washington, DC and the deputy managing editor of The Jerusalem Post

“How the issue of the right of return will be solved I don’t know, it’s too early [to say], but it is a sacred right that has to be dealt with and solved [with] the acceptance of all.” He says statehood “will never affect the right of return for Palestinian refugees.”

... “The state is the 1967 borders, but the refugees are not only from the 1967 borders. The refugees are from all over Palestine. When we have a state accepted as a member of the United Nations, this is not the end of the conflict. This is not a solution to the conflict. This is only a new framework that will change the rules of the game.”

The Palestinian Liberation Organization would remain responsible for refugees, and Abdullah says that UNRWA would continue its work as usual.

...He says the U.S. should be mindful of “signals in the region … that are ringing a bell.” He mentions the tension between Turkey and Israel and the recent eruption of protests at the Israeli embassy in Cairo.

“If wrong policies are adopted in the U.S., it will only give a freer hand to extremism. It only empowers negative forces. And this will make it more difficult and complicated for rational forces to prevail.”

Despite clear signs of opposition from the U.S., Abdullah says anything could happen next week, when the U.N.’s General Assembly session opens and the issue of Palestinian statehood will be debated.
“When we go [to the United Nations],” he says, “we [will not] bet on anything.”

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